You may have heard Michael Lewis’ book The Big Short, about the real estate crash in 2008, is now a movie. Apparently you can skip it. “Longtime Will Ferrell collaborator, former ‘SNL’ head writer and director Adam McKay, whose work usually isn’t even on the smart end of the comedy spectrum, co-wrote and directed ‘The Big Short,’ an inept and frequently idiotic take on Michael Lewis’ deeply engaging book, and it will largely be remembered for three things: bad haircuts, overacting and Margot Robbie in a bubble bath. . . .” writes Kyle Smith in the New York Post. Here’s what I wrote about … [Read more...]
Archives for December 2015
The Monday Melee: Waiting for the Santa Claus Rally?
Is Janet Yellen Mrs. Claus? Will U.S. stocks see a Santa Claus Rally after the Fed decision on interest rates? Bloomberg reports: Investors waiting for an end-of-year rally just got a present from Janet Yellen. The Standard & Poor’s 500 Index began the second half of December with gains that nearly wiped out its loss for the month, setting it up to close out the year in positive territory with 10 trading sessions to go. The 1.5 percent increase Wednesday nearly equaled the gauge’s average advance in the last two weeks of the year since 1995. The benchmark slipped 0.2 percent as of … [Read more...]
Where’s the Santa Claus Rally?
December is usually the strongest month of the year for the stock market investors, but this December has gotten off to a slow start. As of yesterday’s close, the S&P 500 was down about 1.3% for the month. Is the weak start to December a signal that Santa might not be coming to Wall Street this year? That’s possible, but historically the Santa Claus rally doesn’t get underway for a few more days. Our chart shows that the strong gains in December don’t start until around mid-month. Mid-month also happens to coincide with the next Fed meeting. That raises the question: Will Chair Yellen play … [Read more...]
Vanguard GNMA: Slow and Steady
Slow and steady wins the race. … [Read more...]
Chinese Yuan Makes new Low
The Chinese Yuan has quietly made a new 52-week low and the currency is now trading at its cheapest level relative to the dollar in more than 4 years. … [Read more...]
Successful Investing Is a Mindset
Dick Young wrote in the October 2015 issue of Intelligence Report: As you know, I do not check the prices of my investments daily, weekly, or even monthly. I do an annual checkup only at tax time. When I make a significant investment, I have no intention of liquidation anytime soon. I am in for the long haul. Thus, short- or even medium-term volatility is of zero concern to me, beyond keeping an eye out for a name on my watch list that may have taken a temporary beating due to no particular fault of its own. So, then, successful investing is a mindset based upon a master plan that allows an … [Read more...]
The Monday Melee: Saudis Push Oil Prices Further Down
Lowest Prices in Seven Years NPR reports that after Saudi Arabia told other oil producers it wasn't planning to cut production at an OPEC meeting, prices for crude oil began falling to their lowest levels in years. Oil prices fell to their lowest levels in seven years, after OPEC officials failed to agree Friday on how to address the global supply glut. By midday Monday, Brent crude futures fell 5 percent to $40.68 a barrel, the lowest price since 2009. The U.S. oil benchmark West Texas Intermediate crude dropped below $38 a barrel. No More Target Proved Reserves Price of Oil … [Read more...]
Recession Risk: Will Higher Rates Kill Growth?
With the odds of a rate hike at the Fed’s December meeting now approaching 75%, we are picking up chatter about the Fed making a policy error if they go through with a hike. This line of argument contends that the U.S. economy is too weak for a rate hike or series of rate hikes. Higher interest rates will just send the economy right back into recession and the Fed won’t have any tools to combat the downturn. While the U.S. economy may not be as strong as the Fed assumes (see our dismal chart on the Dow Transports vs. Industrials below), hiking rates in December wouldn’t be the policy error. … [Read more...]
Does Your State have Creeping Tax Brackets?
If your state isn't indexing its tax brackets to inflation, you could find yourself paying a higher rate even though you're not any higher up the income ladder. Research from the Tax Foundation explains your state's system. … [Read more...]
This is Why Economic Policy Keeps Getting Worse
Noah Smith wrote a piece last week for Bloomberg View titled Most of What you Learned in Econ 101 is Wrong. Noah is a PhD economist who teaches at Stony Brook University. Noah tells readers that introductory econ textbooks have a big problem and that problem is that most of what is in them is probably wrong. Noah says: “In the last three decades, the economics profession has undergone a profound shift. The rise of information technology and new statistical methods has dramatically increased the importance of data and empirics. This means that many professional economists are no longer, … [Read more...]